Stakeholders Understanding Business Higher Business Management Types of

Stakeholders Understanding Business Higher Business Management

Types of Stakeholders There are two types of Stakeholders L A N R INTE L A N R EXTE are e s e h T m o r f s r lde o h s e s k e n i Sta s bu e h t e outsid are e s e h T rs e d l o h Stake in the ith w m o fr ss e n i s u b

Stakeholders Internal Employees Managers Shareholders External Suppliers Banks and Lenders Government Local Community Customers

Internal Stakeholders EMPLOYEES INTEREST Good Salary Job Satisfaction Good Working Conditions Job Security INFLUENCE They can change the standard of their work Industrial Action

EMPLOYEES INFLUENCE Industrial Action • • Strike Sit in Overtime Ban Work to Rule

Internal Stakeholders MANAGERS INTEREST Good Salary/Bonuses Job Satisfaction Responsibility and Status INFLUENCE They make Decisions Such as, hiring staff, selling products, etc

Internal Stakeholders SHAREHOLDERS INTEREST INFLUENCE Want the firm to be profitable They can influence decision making Healthy dividends They can vote for certain Directors Improved share value They can choose to sell their shares

Questions -1 Some Key Terms • Name 3 Internal Stakeholders of an organisation. • In your jotters: 1. Describe the Interest these Stakeholders may have in the organisation. 2. Explain what influence each of these Stakeholders may have over the organisation.

Your Some Key. Task Terms • Use the worksheet and find out current or recent news stories which may affect Internal Stakeholders.

Stakeholders Internal Employees Managers Shareholders External Suppliers Banks and Lenders Government Local Community Customers

External Stakeholders SUPPLIERS INTEREST INFLUENCE Will want the business to be successful to ensure repeat custom Change prices Offer discounts They depend on this custom for survival Change their lead times

External Stakeholders BANKS AND LENDERS INTEREST They want to make sure cash flow is stable INFLUENCE They can choose whether to grant or withhold loans They can extend or shorten the loan repayment period So they can ensure repayment They can change the interest rates

External Stakeholders GOVERNMENT INFLUENCE Legislation (Minimum Wage Act) Can issue bans (Smoking in local areas) Set taxation rates Offer or withhold grants and licences

External Stakeholders LOCAL COMMUNITY INTEREST Companies provide jobs for an area INFLUENCE Can make complaints to Local Authority Businesses offer goods/services The community cares about the area they live in Can protest against the company

External Stakeholders CUSTOMERS INTEREST INFLUENCE They want best quality products They can choose whether or not to purchase goods or services At lowest possible price A range of goods and services They may recommend the business to friends and family

Questions -2 Some Key Terms • Name 4 External Stakeholders of an organisation. • In your jotters: 1. Describe the Interest these Stakeholders may have in the organisation. 2. Explain what influence each of these Stakeholders may have over the organisation.

Your Some Key. Task Terms • Use the worksheet and find out current or recent news stories which may affect External Stakeholders.

Exam Style Question Describe the influence stakeholders could have on an organisation. (5 Marks)

Exam Style Question

Exam Style Question Identify 2 stakeholders, other than employees, that will be affected by the closure of a call centre. Describe their interest in the business. (4 Marks)

Exam Style Question (Customers) will be affected as they will no longer be able to (contact that particular call centre for help or advice and may not get as good customer service). (Banks) will be affected if the call centre has an outstanding loan. They are (interested in the stability of the organisation and will be concerned as to whether or not the call centre can repay the loan). (4 Marks)

Social Implications of Business Would you be happy living next to this?

Stakeholders Interdependence Why a stakeholder needs another stakeholder

Stakeholder Interdependence Owners need employees to be as productive as they can Owners need customers to buy products from them to make profit Employees need owners to provide the necessary job training Customers need owners to provide them with the product they want

Stakeholders Conflict Disagreements that can occur between different stakeholders

Stakeholder Conflict Managers will want to make high profits on goods and services Managers may want to close a branch to save on staff wages Customers want the best quality for the cheapest price Employees will want to keep their jobs

Exam Style Question Explain how the interests of employees might conflict with 2 other stakeholders in the business. (2 Marks)

Exam Style Question Explain how the interests of employees might conflict with 2 other stakeholders in the business. (2 Marks) A business may be facing financial difficulties and to resolve this it may be necessary for the manager/owner to close a branch to save on staff wages however this will not be a popular decision with staff as they could lose their jobs. Employees may want to reduce the number of hours that a shop is open (close on Sundays) however customers will not be happy with this as they are now used to retailers being open 7 days a week.